Last week, China Evergrande secured a reprieve from the recent turmoil after paying interest on an offshore bond ahead of Saturday’s deadline.
BEIJING: Shares of struggling Chinese developer Evergrande rose on Monday after it announced it had resumed work on more than 10 projects, as it sought to allay fears over its debt problems.
The liquidity crisis at one of the country’s largest real estate developers has shaken investor sentiment, rocked China’s crucial real estate market and fueled discussions about the fallout in the wider economy.
But the company – drowned in a sea of ââdebt worth more than $ 300 billion – last week paid interest on an offshore bond just before Saturday’s due date, averting a default and giving it a stay. much needed.
Evergrande has reportedly missed several offshore bond payments and although it had a 30-day grace period for some of them, it was generally expected that it would not be able to meet its obligations. .
And on Monday, investors welcomed the announcement that its Shenzhen operations had “resumed work and production for more than 10 projects at six sites.”
The company’s shares rose more than four percent at the start of trading.
The group had 778 projects covering 233 cities in China at the end of June, according to its latest interim report.
However, work at some sites had been halted in recent months, as suppliers and contractors complained that the company had not yet paid them.
The company has been in crisis since Beijing last year began cracking down on the country’s colossal real estate sector – estimates say it makes up a quarter of the economy – in an attempt to curb excessive debt.
But the borrowing restriction measures have reduced the ability of companies to carry out their projects.
Anxious homebuyers told AFP they showed up on unfinished sites asking for information.
“Since the start of the year, tight regulation of the real estate market has plunged Evergrande into a vortex of crisis,” the company said in a statement on its WeChat account on Sunday.
âThe way the company will resume work and production on hundreds of projects across the country, and deliver buildings on time, is affecting the nerves of the whole company,â Evergrande added.
In a separate statement, he provided updates on the progress of specific projects and said “securing delivery of buildings” was central to the company’s work.